With soccer's shutdown continuing due to the coronavirus outbreak, attention shifts to figuring out how and when it can return to normality. Gab Marcotti reacts to the main talking points in the latest Monday Musings.
How football can tackle this financial crisis
With football shut down virtually everywhere now that the Australian A-League is on hiatus too, clubs and leagues are adding up the economic cost. A number of clubs are already taking action to see if they can legally cut wages and soften the impact as the football economy grinds to a halt.
In France, where local legislation allows it, some clubs like Olympique Lyonnais have put their players on "partial unemployment," with the government contributing up to €6,000 a month in wages. In Germany, Borussia Monchengladbach players and club officials have agreed to forgo all or part of their wages during the crisis, and others are following suit. Over at Barcelona, players have also agreed to make sacrifices, as president Jose Maria Bartomeu announced Sunday. There are also many tales of footballers making significant donations to various charities or directly to health systems fighting the pandemic.
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All of this is great and there are, undoubtedly, tough times ahead for all of us in affected areas, not just footballers. But it's also critical that if sacrifices are made and money is raised, that it gets spent in the most effective and meaningful ways possible. And that while everybody has needs, those needs must be individually assessed.
We've had all sorts of estimates of how much clubs are going to lose in revenue. KPMG, for example, puts the total losses for Europe's Big Five leagues at anywhere from €3.45-4 billion. The Premier League is hardest hit at €1.15-1.25 billion, and then it goes all the way down to Ligue 1 at €300-400 million. That's a whopping amount, yes, but look a little closer.
First of all, when you put it in percentage terms, it's slightly less scary. According to UEFA's benchmarking reports, the Big Five leagues earned €15.7bn in 2018. Presumably they were due to earn more than that in 2019-20, but for argument's sake let's take that figure: it means the losses amount to somewhere between 22-25% of revenue. That's significant, obviously, but it's not as catastrophic as it sounds in a sport where the single biggest cost -- usually amounting for 60-80% of revenue -- is fixed-term player contracts.
Furthermore, this is all predicated upon the worst-case scenario. That means no more games being played and therefore not being broadcast either, with media rights holders and sponsors refusing to pay or demanding their money back. Obviously, it's a possibility: we don't know when the pandemic is going to end or when it will be safe to play again. But if you're assessing risk and probability, the likelihood, however uncertain, is that some football relating to the 2019-20 season will be played. (English football, for one, has defiantly said the season will finish come what may, even if it means playing well into the autumn and winter and maybe even beyond.) And until we hear from media rights holders and sponsors saying they want their money back, you can't simply assume that money won't be coming in.
There's another huge variable here. If we do play again in the 2019-20 season, you would assume that, initially at least, it might be behind closed doors. That, of course, would greatly impact matchday revenue: not just ticket sales, but concessions, parking, hospitality and so on. But again, we simply don't know how and where and to what extent the damage will be done. There's little question that playing behind closed doors, once everybody has been tested and cleared to do so, presents a lower health risk to the population at large, and, crucially, it allows for matches to get back on television. That's why several leagues -- including the Bundesliga, where games in front of no fans are euphemistically called "ghost games" -- seem to accept that this will be a necessary intermediate step on the way back to normality.
Note, however, that most of the above applies to the top leagues, who receive substantial TV income as a proportion of their revenue. In most countries, the single-biggest revenue drivers for teams outside the top domestic league is matchday income. They're the ones who would be hurt the most from playing behind closed doors, and it simply may not be viable for them. Here, too, we may need a two-step solution: Maybe lower leagues play on into the summer while top flights fulfill what fixtures they can, whether behind closed doors or, if safe to do so, under normal conditions.
We have a recognition that this is a major public health crisis and we have a willingness from stakeholders to work together to resolve it and from players and club officials to take pay cuts. That's key. What we need now is accountants -- smart, impartial ones. We need to establish exactly who is getting hit, how they're getting hit and the best way to help them. For some, like many lower-tier clubs, it's evidently going to be an issue of cash flow. In some cases, where there is a strong social safety net, government legislation to protect workers might pick up the slack. In others -- Britain comes to mind -- it's going to take something else.
The irony is that in many cases, the ones who need it most require the least help. Last week, the 47 clubs that make up League 1 and League 2 in England said they estimate they will lose a combined £50m if the campaign cannot start before the summer. The Premier League's cumulative wage bill is around £3bn. A 1% levy on Premier League wages would raise £30m; you could do it in the form of an interest-free loan to be repaid over time, or players could make a voluntary donation of 1%: given that many of them at one point played for League 1- or League 2-sized clubs, whether in England or elsewhere, it's hard to imagine folks wouldn't chip in. You'd imagine there would be relief from governments and the league as well.
Remember though: this £50m shortfall is the clubs' estimate, and it only applies if they can't restart before the summer. We don't know if their estimate is accurate, and we don't know when they'll restart. That's why the single best investment authorities can make right now is accountants, modellers and other financial nerds.
Football being football, there will be some who will try to benefit from this. Like owners who'll plead poverty from their offshore hideaways, or clubs that will apply for help when, in fact, they could sign one fewer reserve left-back and be just fine, or agents who'll use a club's struggles to strip them of talent.
There are measures that can be taken against all these ills, but first we need to establish the facts as accurately as possible. If we do that, we can then make the decisions that need to be made.
Domestic leagues are 'far more important' than Euro 2020
Steve Nicol thinks domestic leagues finishing out their seasons is the only fair way to decide titles.
Infantino's right: Now is the time for bold ideas
Gianni Infantino turned 50 on Monday and weighed in on the COVID-19 crisis and football's reaction in an interview with the Italian daily Gazzetta dello Sport.
He hit all the right notes, talking about how health comes first and foremost, how stakeholders need to work together and how FIFA had donated funds to the World Health Organisation and would continue to help. But maybe the most relevant part was when he talked about the crisis being an opportunity to make lasting, foundational change to the sport and the way it is run.
Infantino talked from his perspective, wishing to see the growth of the game around the world so that maybe 50 different nations (rather than "eight European and two South American") had a shot at winning the World Cup, or the day when 20 different clubs (rather than the current six European ones) had a chance to win the Club World Cup. It's a theme he has hit before: the idea that FIFA's goal ought to be creating an environment where investors from all over the globe put money into the game around the world, not just in Europe, as they have been doing.
You can be skeptical about him or cynical about his motives, but there's a fundamental seed there that should not be ignored. Times of crisis are when you can effect the biggest change. It's when stakeholders -- whether fans, clubs, associations or investors -- are most receptive to new ideas.
Infantino also talked about having fewer competitions, but making them more meaningful. Playing fewer games, but making them more compelling. Possibly having fewer professional clubs overall, but with a more level playing field. And he talked about how a big part of the game (transfers, agents, ownership) was still a largely unregulated, lawless place.
You may not agree with all of the above, but it's critical that when this is over, football has this conversation with itself. It's too big an opportunity to waste.
Premier League plan is unrealistic
The Telegraph, citing various Premier League sources, reported on a plan this past weekend that would see English football return in June and be fully wrapped up by July 12 in order for next season to begin without a hitch on August 8, as originally planned.
I'm all in favour of the 2020-21 season being disrupted as little as possible. If we need to resolve 2019-20 in a truncated fashion, let's do it: let's come up with a system that's as fair as possible and give ourselves the best possible shot of life returning to normal next season. Screwing up two seasons is worse than screwing up one season and hopefully, we all get that.
But the plan above, which would leave just 27 days into which to cram holidays and preseason training, is absurd. In fact, it sounds like it was drawn up by an accountant at a Premier League club. If you're going to cram in the entirety of the unplayed 2019-20 season into less than six weeks -- as they seem intent on doing -- you have to give the players time off afterwards.
Go easy on stars who went home
A number of South American stars -- including Thiago Silva, Gonzalo Higuain and Neymar -- have returned home during the coronavirus crisis and received plenty of criticism for doing so. Some fans seems to think that if they're stuck at home gutting this out, everybody else needs to do so as well.
I disagree. First of all, it's not as if they escaped under cover of night through the sewers or using an alias. Their clubs gave them permission, they tested negative for COVID-19 and they paid their own way home (usually by private jet). Leaving aside the fact that some had personal reasons to do so (Higuain's mother is unwell), it's not as if having multimillionaire footballers locked down in luxury cribs in Paris or Turin rather than Sao Paulo or Buenos Aires is going to resolve this crisis any quicker.